One of the companies that has made a name for itself this lockdown is Zoom. With very little physical meetings and no interaction, the need for formal video setups is ever high. Although the platforms like Skype, Google Duo and Facetime were already well integrated in the market, the lockdown saw a need for a well built platform that included both the formal element as well as ease of usability.
Founded by Eric Yuan in 2011, Zoom Video Communications, Inc. is a US-based Communications technology company. The estimated net worth of the founder Eric Yuan has increased by more than $4BN this quarantine and whilst we were all busy chatting with our friends, attending or hosting classes and webinars, Zoom’s stock during the same time has more than doubled. However, the rise of Zoom makes sense in all manners as per its performance prior to lockdown.
The company was already rising with revenue up by 88% in the fiscal year 2020. With the already ever-increasing demand for online services, Zoom was bound to be a hit. The platform offers users the accessibility to call over 100 users at once, adding to mix its ease of usability and the quick change in policies in regard to the Quarantine gave a big boost to its revenue.
During the Lockdown and Ahead
During the lockdown, the platform was downloaded heavily. The App Tracking Firm Attopia states that the App was downloaded over 2M times around the world by the last week of March. The growth has been ever since increasing, from 10M daily users at the end of 2019 to more than 200M by March. During the first three months of this year, an increase of 169% of revenue has been posted by the company as compared to the same period during the last year.
This sudden surge has not left any stones unturned whatsoever, the investors have noticed this rise and have been so excited, they accidentally invested in the wrong Zoom. Starting at $70 a share in January, now the stock price has risen to a humongous $262 a share. This in turn has led to an increase in its market value by almost 380%, currently valued at around $73BN, more than 9 times of its rival video companies, the company has been acquiring a lot of attention from the investors. Net profit has too significantly risen to about $27M from mere $200,000 last year.
Zoom states it had reached a peak usage of 300M daily meetings in April, although the figure has slightly lowered since the firm is quite confident it will achieve the same figures again.
Although the stock prices have risen significantly and the company has been very successful on paper, there surely are some difficulties the company has been facing. Zoom Video Communications have been recently facing a lot of scrutiny over their privacy policies. Until recently, Zoom had the right to do whatever it wanted with users’ personal data, and its encryption policies have been more than misleading. Zoom’s ease of use has allowed many individuals to blast enter into various meetings and cause further troubles, more and more security issues are being covered on a daily basis but unfortunately the number of issues being discovered has overshadowed the fixes by large.
In the end, the influx of users has been high for zoom ever since corona marked its entry and the same trends are to be expected given no schools, colleges or even mass physical meetings are to happen any sooner.